Confused between various car insurance companies and their plans? don't worry we will explain you some key facts about the car insurance and how to choose among them.
Car insurance - the key facts
Stay Aware about these 13 Key Facts about Car Insurance in India
There is a slew of automobile companies that offers cars in India. These cars not merely epitomize comfort but are pocket-friendly too. Loaded with umpteen features and functionalities, it sometimes gets confusing to make a purchase of a car. Therefore, lots of minds ponder together before making the purchase of a car in India. Children being one of the major influencers also play an integral role in finalizing a car model. But all the mirth and merriment disappears like steam from kettle when the valuable asset meets with a mishap.
Along with physical damage to the body, the car also loses its shape. A car insurance in such a case is no less than a blessing because it bestows financial help and oodles of other benefits. However, with lots of car insurance companies in India waiting with their arms wide open for the customers make the purchase decision of the automobile insurance a hard nut to crack.
But before selecting from various car insurance companies and nodding for a car insurance, remember the following key facts about it.
Go back to your LAW basics
Under the Motor Vehicle Act of India, Car Insurance is mandatory. One of the major reasons behind automobile insurance is third party liability. If a third party is injured or his/her vehicle takes the damage because you were there behind the steering wheel, then the law requires you to at least have third party car insurance to compensate that "someone else" financially.
Note that the premium of third party auto insurance is calculated on the engine capacity of your car. Because this automobile insurance policy covers only the damage that has happened to the third party, its premium is less as compared to other complete cover car insurance policies. Also, it should be kept in mind that in case, if there is no third party insurance, then the owner of the car responsible for damaging the third party has to face legal troubles.
A Majority Opt for Full Automobile Insurance or Comprehensive Policy
If a third party auto insurance coverage is limited to the damage of the third party, then a comprehensive automobile insurance offers coverage to the third party as well as own damage. In the case of an accident, the insurance companies not only cover medical expenses of the other party but also of yours and passengers in your vehicle.
Other than covering vehicle damage and medical expenses, the comprehensive auto insurance policy covers damage to your automobile due to:
- Natural calamity,
- Loss due to theft,
- Damage because of terrorist activities; and
- Repair in moving your vehicle from one location to another.
Due to the wide insurance cover, the car insurance quotes or the premium of a comprehensive auto insurance policy is also higher. It is calculated on the basis of the insurable value of your automobile.
Car Insurance in case of buying a second-hand car
Be it a new car or an old one. Purchasing a valuable asset and zooming with it on the road may allow important formalities like transferring the automobile insurance under your name slip through the cracks. As per one of the leading car insurance companies in India, “For every 10 new cars sold, 22 used cars are finding buyers.”
As per Insurance Regulatory and Development Authority of India or IRDA, the insurance of the old car should be moved to the new owner within 14 days from the transfer of registration, failing which no claim is payable in case of own-damage. Also, driving a four-wheeler in India, without an auto insurance is an offense as per Indian Motor Vehicle Act 1988. Thus, it is advised to calm your senses before introducing an asset to your balance sheet in order to undertake all the necessary formalities.
Be known to the geographical limits:
Don’t just blindly sign on the dotted lines of your automobile insurance. There are a plethora of clauses that need your kind attention. One such clause is of geographical limit, which informs you about the geographical area in which your auto insurance policy is valid.
In case, if a mishap takes place beyond that geographical limit, you are not eligible to file a claim. If you wish to broaden the geographical limit of your car insurance policy, you need to pay an extra premium.
Own a Luxury Car?
If you are blessed with what many dreams of then here is what you need to know about its safety and protection. Yes, we are talking about luxury cars which are a magnificent add-on to your lifestyle.
If met with a mishap, renovation of your luxurious palace on wheels could drill a very big hole in your pocket. There is always a concern for its safety too. But luckily, a car insurance takes care of all. Also, if your luxury car is stolen, the car insurance could save you with compensation.
Not declaring NCB (No Claim Bonus)
As the name suggests, NCB or no claim bonus is a reward from the insurer, which is bestowed to you in case you don’t claim your insurance. It is a discount that ranges from 20% to 50% and usually given on the premium payable. To avail the discount, it is recommended to bring to the notice of insurer at the time of renewing the automobile insurance policy.
Leaving Discount opportunities on the table
Folks mostly hesitate while negotiating the premium amount of their auto insurance policy with the car insurance companies. Some common discounts opportunities an individual could get include:
• Paying your policy amount all at once.
• Monthly payments via methods such as EFT.
• Insuring more than one car.
Opting for High Voluntary Deductibles
Insurance Regulatory and Development Authority of India (IRDA) has set a mandatory deductible limit in your car insurance policy. Under this limit, if there arises any claim, then the amount of deductible is paid by the policyholder before the insurer shoulders the responsibility of the remaining claim.
Many choose high deductible because higher the amount chosen lower will be the premium amount. But these deductibles discourage policyholders to raise smaller claims as a part of it will be paid by them. So, if you don’t want to restrict yourself from raising smaller claims then try not to get lured by high deductibles.
Go for add-ons along with your car insurance
It so happens that you purchase comprehensive car insurance policy and ignores the add-ons and other benefits. For instance, the Zero Depreciation add-on prevents depreciation from reducing the value of your car parts. It ensures that you get the full value of these parts in case of damage. Other add-ons include key replacement, roadside assistance, etc.
Compare purchasing Auto Insurance Offline with Online
Before you sign on those dotted lines and start paying the premium, know the benefits and compare the cons of purchasing automobile insurance from both the mediums. In today's technological advanced era, everything is available online and so is a Car Insurance with a plethora lucrative quotes and benefits such as no broker charges, safer payments, time-saving & cost cutting, easy management and money saving deals and offers.
What if a Third Party can’t apply brakes on time?
In case, if a third party damages your car badly, the car insurance company should be informed immediately. Also, an FIR should be registered as soon as possible with the police against the third party.\
Renewal of the Auto Insurance is a tricky business
The automobile insurance in India lasts for a year. A delay of even a day allows the car insurance companies to reject the renewal of your automobile insurance. Also, the delay may demand inspection of your car and ask you to submit fresh documents so that the entire process could start from the scratch. Thus, make sure to renew your car insurance policy before it expires.
The insurance of the power source
LPG or CNG kit could be insured too under the car insurance policy. However, the same should be informed to either RTO or insurer.
The Bottom Line
Undoubtedly, motor vehicle insurance is one such tool that aids to a great extent in case if any tragedy takes place. Not only does it offer a financial relief in case of an accident but it also lends financial help in the case of theft of burglary. The same benefits and features have led to the tremendous growth of the motor vehicle insurance industry. The industry value in the year 2013 was approximately 5.59 Billion US Dollars and as per an estimate, the year 2015 will witness the growth to a whopping 17.4 Billion US Dollars.
With many established car insurance companies now offering the policy over the internet and many startups offering an easy comparison of the auto insurance policies online, purchasing a policy is now a piece of cake.
Such a convenience to purchase a car insurance policy online and the benefits one get from it has attracted a majority of car users in India (both old and new) to either purchase a new car insurance policy from the car insurance companies or renew their expired one.